The Beginning of the End for the EU?

2015-07-20Europe’s citizens have grown quite weary of the bad marriage that their governments have entered into.

After World War II, many politicians talked about creating a united Europe, much like the United States. The idea was that there would be one currency and a federal government that would act in much the same way as does the federal government in the US. They began, very sensibly, with trade agreements and slowly expanded.

Over the ensuing years, the national leaders of Europe steadily pushed forward toward the major goal of a unified Europe under a federal leadership. They reached this point with the Maastricht Treaty in 1992.

My personal belief was that the concept would not succeed over the long haul. Whilst trade agreements can be very beneficial for European countries, the idea that Europe can be unified under a single government and a single currency was, in my opinion, doomed to failure.

The United States was created primarily for the defence of the thirteen American colonies, so that a minimalist central government could protect all the colonies equally. Of course, as soon as the idea was ratified, some political leaders began to try to expand that centralised power. The US federal government then grew, a bit at a time, and eventually became dominant over the states.

Not so with Europe. The various European countries had been around, in one form or another, for centuries and had been based upon tribal groups. Each had its own language and its own culture. Some were more prosperous and had a stronger work ethic than others.

In addition, through historical conflicts, there was a decided lack of trust between many countries. The Irish distrusted the English; the English distrusted the French; the French distrusted the Germans; etc.

The very idea that a Dane, a Dutchman and an Italian could agree on an entire governmental and economic system was an impossibility from the start. Their cultures and national perspectives were deeply ingrained and would not change in a major way, simply because their political leaders had come up with an idea that benefitted them.

However, the EU was on a roll, and around 2000, at a time when I stated, “I’d give the EU twenty years at the outside,” they may well have been at their high point.

In the intervening years, all of the predictable problems have surfaced, and as they have, the people of each of the EU countries have grown increasingly dissatisfied with the union, whilst the politicians of those same countries have done all they could to paper over the problems to keep the EU ship from capsizing.

In recent years, Greece has held centre stage, as, even though it is a small country with an equally small economy, it is a net recipient of EU funding, due to its unfunded social programmes, and is bleeding the EU with no end in sight.

Conversely, the more northern EU countries, where the work ethic is stronger, are footing the bill. For some time now, the possibility of a Grexit has been on the cards, and recent developments have suggested that it may be imminent.

Of course, the political leaders of the EU countries desperately want to hold on to Greece, as a Grexit may well spark other exits, beginning most probably with Italy, Portugal and Spain. Should that happen, the EU would be doomed. And so, the EU is now way out on a limb, far beyond what is safe for the people of Europe, in the hope of keeping Greece on board.

Throughout the course of these developments, the citizens of the EU have been relatively quiet, although the general mood has been one of growing distrust for the union. But recent developments in the Greek tragedy have riled them to the point that representations have been made to their political leaders to consider their own exits. Not surprisingly, the political leaders have remained steadfast that that is out of the question.

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Power to the People

Now that dam has suddenly burst. In Austria, a country that is in far better shape than most of the EU countries, 260,000 citizens have signed a petition, requesting that the government leave the EU and go off the euro. (The threshold for a debate on a possible referendum is 100,000.)

In Italy, another petition has been circulated, with similar results, triggering some 200,000 signatures.

A referendum is planned for the UK, but no date has yet been announced. (The political leaders, predictably, have been dragging their feet for some time on setting the date.)

In France, Spain and Germany, there are similar signs that the citizenries have reached a breaking point with the failed experiment and want out.

And so, should we expect to see a breakup of the EU soon? Not likely. Political leaders are extraordinarily adept at keeping a virtual corpse on life support long after it was obvious to all and sundry that the plug should have been pulled. They do so because it allows them to retain power and the perks that go with it. However, it is not at all in the interest of the citizenry to continue to pour money into a dying union.

Further, Europe’s citizens have grown quite weary of the bad marriage that their governments have entered into. They’re realising that a divorce is inevitable and should be dealt with soon to stem the flow of red ink on their respective national balance sheets.

The Turning Point

But a turning point has been reached. From here on in, what we shall be witnessing will be a groundswell from the citizenries of EU countries, in clear opposition to their political leaders. And this will occur in virtually every EU country before the game is over.

This is no small matter. As this separation of people and state develops, in one country after another, much of the Grand Illusion of the EU will fall away. It will become glaringly clear that the union was created by the political leaders for the political leaders and was never intended to serve the citizenry of Europe.

The countries of Europe had large, costly governments prior to the formation of the EU, a condition that was greatly exacerbated with the additional cost of an uber-government.

In years to come, we may look back and see this point as the one where the tide turned for Europe, and the former EU countries once again became a collection of neighbours, each in competition with the other, each prospering or declining in keeping with its level of work ethic and fiscal prudence.

To be sure, there will be those countries that will fail along the way. Like drug addicts, they must first purge themselves of the entitlements that were beyond what could have been funded.

As a result, they will first experience civil unrest, then frequent changes in leadership, each without any real solution, then a long, slow recovery. Some may learn a valuable lesson; others may simply return to empty promises of politicians and begin the debt cycle over again.

In any case, a turning point has been reached with the EU. After it does reach its end, we may see partnerships forming between some former EU countries, but we are unlikely to see another EU anytime soon.

Editor’s Note: There’s little any individual can practically do to change the trajectory of this trend in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation. That’s what International Man is all about - making the most of your personal freedom and financial opportunity around the world. A great place to start is our free PDF Guide to Surviving and Thriving During an Economic Collapse, click here for more details.